This refers to the reactive inspection conducted on September 12, 2003,
at your Dunbar, West Virginia field station and a temporary job site
in Charleston, West Virginia, and a subsequent follow up inspection at
your Dayton, Ohio office on October 29 and 30, 2003. The purpose of the
inspections was to obtain information surrounding the circumstances related
to a reported overexposure event that occurred on September 9, 2003.
The inspection report issued on November 26, 2003, documented seven apparent
violations of NRC requirements involving an overexposure to a radiographer.
The NRC Office of Investigations (OI) also conducted an investigation
to determine whether personnel employed by U.S. Inspection Services willfully
violated NRC requirements.

On January 6, 2004, a predecisional enforcement conference was conducted
in Region III with you and members of your staff to discuss the significance
and root cause(s) of the apparent violations, and corrective actions
that you have taken or planned to take to prevent recurrence. During
the conference you agreed with the violations presented by the NRC and
provided a discussion of corrective actions that had been or would be
implemented. Enclosure 2 is a copy of the slides that were presented
by you and your staff at the conference.

Based on our evaluation of the information obtained during the inspections
and from the letter you provided to the NRC on January 5, 2004, and information
that you provided during the conference, the NRC has determined that
seven violations of NRC requirements occurred. The violations are cited
in the enclosed Notice of Violation (Notice) (Enclosure 1) and the circumstances
surrounding them are described in detail in the subject inspection report.
The violations involved the failure to: (1) ensure that occupational
personnel do not accrue a cumulative radiation dose in excess of the
regulatory limits; (2) conduct a radiation survey; (3) calibrate a survey
instrument after it was repaired; (4) test an alarming ratemeter for
operability before use; (5) follow established procedures to ensure that
a sealed source contained in a radiographic device was in the locked,
shielded position prior to approaching the device; (6) conduct a daily
inspection of a radiographic exposure device and associated safety equipment;
and (7) ensure that equipment modifications did not compromise the design
safety features of the cable and drive crank assembly. In addition, results
of the OI investigation concluded that none of the violations were willful.
The OI report synopsis is provided as Enclosure 3.

During radiographic operations conducted at a temporary jobsite on September
9, 2003, two radiographers employed by U.S. Inspection Services failed
to comply with several NRC requirements, associated license conditions
and licensee procedures. These failures were directly related to an occupational
overexposure to one radiographer. The individual received a deep dose
equivalent of approximately 20.5 rem (and a corresponding cumulative
annual total effective dose equivalent (TEDE) exceeding 21.5 rem) whole
body, a shallow dose equivalent (SDE) of 140 rem to the skin of the whole
body, and 235 rem to the skin of an extremity, all of which were well
above the allowable annual regulatory limits of 5 rem and 50 rem respectively.
No immediate health effects have been observed as a result of the overexposures.

The NRC considers these violations to be a very significant safety concern
because an individual received a TEDE and a SDE that were in excess of
four times the annual regulatory limit. Furthermore, there was the potential
for a more significant radiation exposure if the exposure to radiation
had been longer and/or the radiographic device used during the event
contained a sealed source with more activity. Additionally, and more
important, this event would not have occurred had personnel employed
by U.S. Inspection Services complied with the regulatory requirements
and the licensee's procedures. Therefore, these violations are categorized
collectively in accordance with the "General Statement of Policy and
Procedure for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600,
as a Severity Level II problem.

In accordance with the Enforcement Policy, a base civil penalty in the
amount of $9600 is considered for a Severity Level II problem. Because
your facility has been the subject of escalated enforcement actions within
the last two years,(1) the NRC considered
whether credit was warranted for Identification and Corrective
Action in accordance with the civil penalty assessment process in
Section VI.C.2 of the Enforcement Policy. Credit is not warranted for
identification because identification of the violations occurred as a
result of the overexposure and given the fact that the NRC identified
virtually all the violations during the reactive inspection that was
conducted subsequent to the event. Credit is warranted for corrective
actions based on the licensee's response to correct the violations and
to prevent a recurrence, specifically, U.S. Inspection Services: (1)
conducted required maintenance on all radiographic exposure devices and
associated equipment; (2) verified that all applicable staff possessed
current copies of the licensee's operating and emergency manuals; (3)
numbered all crank assemblies, guide tubes, and extensions for traceability
purposes; (4) removed equipment with damaged or missing hardware from
service until items were repaired; (5) instituted corporate radiation
safety officer (CRSO) notification of potential equipment condition deficiencies
before use; (6) implemented a program for CRSO review of radiation safety
related field office documentation; (7) provided comprehensive, mandatory
training for all radiographic personnel; (8) replaced the CRSO and added
two assistant CRSOs to assist the CRSO in the administration of the radiation
protection program; and (9) contracted with an outside contractor to
conduct an independent audit of the radiation safety program.

Although the NRC recognizes that application of the civil penalty assessment
process described in Section VII.C.2 of the Enforcement Policy would
result in a base civil penalty in this case, the NRC is exercising discretion
in accordance with Section VI.A.1(c) of the Enforcement Policy and is
proposing a civil penalty at twice the base amount for your staff's particularly
poor performance that preceded and was directly related to the overexposure
event. Specifically, U.S. Inspection Services' management missed numerous
opportunities to identify and correct the staff's inadequate understanding
and implementation of routine licensed activities including the proper
repair, testing, and day-of-use checks of radiographic safety equipment.
In addition, management's poor oversight of radiographic equipment maintenance
hindered your ability to detect inadequate and inappropriate modifications,
repairs, and tests of radiographic safety equipment. The lack of management
oversight of the radiation safety program significantly contributed to
creating the conditions that led to the overexposure event.

Therefore, to emphasize the importance of complying with the regulatory
requirements, ensuring that your personnel adhere to and follow procedures,
providing appropriate management oversight of the radiation safety program,
identifying violations, and implementing prompt and comprehensive corrective
action for violations, and in recognition of your previous escalated
enforcement action, I have been authorized, after consultation with the
Director, Office of Enforcement, and the Deputy Executive Director for
Materials, Research and State Programs, to issue the enclosed Notice
of Violation and Proposed Imposition of Civil Penalty in the amount of
$19,200, or twice the base amount, for the Severity Level II problem.
In addition, issuance of this Notice constitutes escalated enforcement
action, that may subject you to increased inspection effort.

The NRC has concluded that information regarding the reason for the
violations, the corrective actions taken and planned to correct the violations
and prevent recurrence, and the date when full compliance was achieved,
is already adequately addressed on the docket in Inspection Report No.
03035059/2003(DNMS), and U.S. Inspection Services' letter dated January
5, 2004. Therefore, you are not required to respond to the provisions
of 10 CFR 2.201 unless the descriptions in our inspection report and
your letter do not accurately reflect your corrective actions or your
position. In that case, or if you choose to provide additional information,
you should follow the instructions specified in the enclosed Notice.

In accordance with 10 CFR 2.390 of the NRC's "Rules of Practice," a
copy of this letter, its enclosures, and your response, if any, will
be made available electronically for public inspection in the NRC Public
Document Room or from the NRC's document system (ADAMS), accessible from
the NRC Web site athttp://www.nrc.gov/reading-rm/adams.html.
The NRC also includes significant enforcement actions on its Web site
at www.nrc.gov; select What We Do, Enforcement,
then Significant Enforcement Actions.

During an NRC inspection conducted on September 12 and October 29-30,
2003, violations of NRC requirements were identified. In accordance with
the "General Statement of Policy and Procedure for NRC Enforcement Actions," NUREG-1600,
the NRC proposes to impose a civil penalty pursuant to Section 234 of
the Atomic Energy Act of 1954, as amended (Act), 42 U.S.C. 2282,
and 10 CFR 2.205. The particular violations and associated civil penalty
are set forth below:

A.

10 CFR 20.1201 requires, in part, that the licensee
control the occupational dose to individual adults to an annual limit
of 5 rem total effective dose equivalent; 15 rem to the lens of the
eye, and 50 rem to the skin of the whole body or skin of any extremity.

Contrary to the above, on September 9, 2003, the licensee failed to control
the annual occupational dose to an adult to 5 rem total effective dose
equivalent, 50 rem to the skin of the whole body, and 50 rem to the skin
of any extremity. Specifically, a radiographer received a 20.5 rem total
effective dose equivalent (a cumulative total effective dose equivalent
exceeding 21.5 rem), a 140 rem shallow dose equivalent to the skin of the
whole body, and a 235 rem shallow dose equivalent to the skin of an extremity,
all in excess of the annual occupational dose.

B.

10 CFR 34.49(b) requires, in part, that the licensee shall, using
a survey instrument, conduct a survey of the radiographic exposure
device and the guide tube after each exposure when approaching the
device or the guide tube to determine that the sealed source has
returned to its shielded position before exchanging films, repositioning
the exposure head, or dismantling equipment.

Contrary to the above, on September 9, 2003, the licensee failed to conduct
a survey of the radiographic exposure device and the guide tube after each
exposure when approaching the device or the guide tube. Specifically, a
radiographer conducted an inadequate survey of the radiographic exposure
device by failing to determine that the sealed source was not in its shielded
position prior to exchanging film and repositioning the exposure head.

C.

10 CFR 34.25(b)(1) requires, in part, that each radiation survey
instrument be calibrated at intervals not to exceed 6 months and
after instrument servicing, except for battery changes.

Contrary to the above, in May of 2003, the licensee serviced a survey instrument
and did not have it calibrated. Specifically, the licensee repaired an
NDS Model ND-2000 survey instrument, Serial No. 2755, in May 2003
and used this uncalibrated instrument to perform required radiation surveys
on several occasions between May 2003 and September 9, 2003.

D.

10 CFR 34.20(b)(3) specifies that modification of radiographic
exposure devices, source changers, and source assemblies and associated
equipment is prohibited, unless the design of any replacement component,
including source holder, source assembly, and controls or guide tubes,
would not compromise the design safety features of the system.

Condition 21 of License No. 34-06934-02 requires, in part, that the licensee
conduct its radiation safety program in accordance with the statements,
representations, and procedures contained in the letter dated June 5, 2001.

Attachment No. 1, "Quarterly Inspection and Maintenance of Iridium/Cobalt/Cesium
Exposure Devices," of Procedure RS-GP-9, Revision 2, "Inspection and Maintenance
of Radiographic Exposure Devices, Transport/Storage Containers, Associated
Equipment, and Survey Instruments," attached to the letter dated June 5,
2001, states that modification of any exposure device and associated equipment
is prohibited, unless the design of any replacement component would not
compromise the design safety feature of the system.

Contrary to the above, an exposure device component, specifically, the
source crank assembly, was modified by the licensee and this modification
directly compromised the design safety feature of the system, in that,
the licensee used parts from two damaged crank assemblies to assemble one
working crank. The modified crank assembly did not contain the wear strip,
the brake latch, or two of four required bolts used to hold the crank together,
all of which were necessary components critical to safety. The modified
crank assembly was subsequently used to conduct radiographic operations
on August 12, August 18, and September 9, 2003.

E.

10 CFR 34.20 (c)(2) states, in part, that the radiographic exposure
device must automatically secure the source assembly when it is cranked
back into the fully shielded position within the device. This securing
system may only be released by means of a deliberate operation on
the exposure device.

Condition 21 of License No. 34-06934-02 requires, in part, that the licensee
conduct its radiation safety program in accordance with the statements,
representations, and procedures contained in the facsimile dated October
23, 2002.

Item 2.16.1 of Procedure RS-5-1, "Operating Instructions for Technical
Operations Models 660, 680, & 741 Series Exposure Devices (Projectors)," attached
to the facsimile dated October 23, 2002, states, in part, that after source
retraction, apply a slight amount of forward pressure on the crank handle,
as to expose the source, to ensure that the positive locking mechanism
has actuated.

Contrary to the above, on September 9, 2003, the licensee failed to ensure
that the radiographic exposure device automatically secured the source
assembly when it was cranked back into the shielded position after source
retraction and failed to apply a slight amount of forward pressure on the
crank handle as to expose the source, to ensure that the positive locking
mechanism was actuated.

F.

10 CFR 34.31(a) requires, in part, that the licensee perform visual
and operability checks on radiographic exposure devices, transport
and storage containers, and associated equipment before use on each
day the equipment is to be used to ensure that the equipment is in
good working condition, the sources are adequately shielded, and
that required labeling is present.

Condition 21 of License No. 34-06934-02 requires, in part, that the licensee
conduct its radiation safety program in accordance with the statements,
representations, and procedures contained in the letter dated June 5, 2001.

Item 3.0 of Procedure RS-GP-9, "Inspection and Maintenance of Radiographic
Exposure Devices, Transport/Storage Containers, Associated Equipment, and
Survey Instruments," attached to the letter dated June 5, 2001, states,
in part, that the radiographer/assistant radiographer check before use
on each day the equipment is to be used: (1) the camera for damage to fittings,
lock, fasteners and labels; and (2) the crank for damage and loose hardware.

Contrary to the above, on September 9, 2003, radiography personnel failed
to check the radiographic exposure device and associated equipment as required.
Specifically, radiography personnel did not check: (1) the camera for damage
to fittings, lock, fasteners and labels; and (2) the crank for damage and
loose hardware.

G.

10 CFR 34.47(g)(1) requires that each alarm ratemeter be checked
to ensure that the alarm functions properly (sounds) before using
the ratemeter at the start of each shift.

Condition 21 of License No. 34-06934-02 requires, in part, that the licensee
conduct its radiation safety program in accordance with the statements,
representations, and procedures contained in the letter dated August 10,
2001.

Item 3.3 of Procedure RS-GP-2, Revision 3, "Personnel Monitoring Equipment
and Usage," attached to the letter dated August 10, 2001, requires, in
part, that each radiographer/assistant radiographer wear an assigned rate
alarm meter; check the battery and audio tone by pressing the push button
at the arrow and verifying that the LED illuminates and the alarm sounds;
and do not use the rate alarm meter if either test fails.

Contrary to the above, on September 9, 2003, a radiographer's assistant
failed to perform the required battery and audio tone tests on his assigned
rate alarm meter (NDS Products Model RA-500, Serial No. 29895). Specifically,
the radiographer's assistant failed to press the button at the arrow and
verify that the LED illuminated and the alarm sounded.

The NRC has concluded that information regarding the reason for the
violations, the corrective actions taken and planned to correct the violations
and prevent recurrence, and the date when full compliance was achieved,
is already adequately addressed on the docket in Inspection Report No.
03035059/2003(DNMS), and U.S. Inspection Services' letter dated January
5, 2004. However, you are required to submit a written statement or explanation
pursuant to 10 CFR 2.201 if the descriptions in our report
and your letter do not accurately reflect your corrective actions or
your position. In that case, or if you choose to respond, clearly mark
your response as a "Reply to a Notice of Violation; EA-03-204" and send
it within 30 days of the date of the letter transmitting this Notice
of Violation (Notice).

The licensee may pay the civil penalty proposed above in accordance
with NUREG/BR-0254 and by submitting to the Director, Office of Enforcement,
a statement indicating when and by what method payment was made, or may
protest imposition of the civil penalty in whole or in part, by a written
answer addressed to the Director, Office of Enforcement. Should the licensee
fail to answer within the time specified, an order imposing the civil
penalty will be issued. Should the licensee elect to file an answer in
accordance with 10 CFR 2.205 protesting the civil penalty,
in whole or in part, such answer should be clearly marked as an "Answer
to a Notice of Violation" and may: (1) deny the violations listed
in this Notice, in whole or in part, (2) demonstrate extenuating
circumstances, (3) show error in this Notice, or (4) show other
reasons why the penalty should not be imposed. In addition to protesting
the civil penalty, in whole or in part, such answer may request remission
or mitigation of the penalty.

In requesting mitigation of the proposed penalty, the factors addressed
in Section VI.C.2 of the Enforcement Policy should be addressed. Any
written answer in accordance with 10 CFR 2.205 should be set
forth separately from the statement or explanation in reply pursuant
to 10 CFR 2.201, but may incorporate parts of the 10 CFR 2.201 reply
by specific reference (e.g., citing page and paragraph numbers) to avoid
repetition. The attention of the licensee is directed to the other provisions
of 10 CFR 2.205, regarding the procedure for imposing a civil
penalty.

Upon failure to pay any civil penalty due which subsequently has been
determined in accordance with the applicable provisions of 10 CFR 2.205,
this matter may be referred to the Attorney General, and the penalty,
unless compromised, remitted, or mitigated, may be collected by civil
action pursuant to Section 234(c) of the Act, 42 U.S.C. 2282c.

If you choose to respond, your response will be made available electronically
for public inspection in the NRC Public Document Room or from the NRC's
document system (ADAMS). ADAMS is accessible from the NRC Web site athttp://www.nrc.gov/reading-rm/adams.html. Therefore,
to the extent possible, the response should not include any personal
privacy, proprietary, or safeguards information so that it can be made
available to the Public without redaction.

In accordance with 10 CFR 19.11, you may be required to post this Notice
within two working days.

Dated this 15
th
day of June 2004.

1.
A Severity Level III violation was issued on November
29, 2002, for failure to have two qualified individuals observe radiographic
operations (EA-02-201).